CNBC's Kelly Evans reports European stocks are on track for their biggest weekly decline since November, as fear about Greece and Spain grow and Moody's downgrades 16 Spanish banks, including the euro zone's largest bank, Banco Santander.

Are we talking our way to a Greek exit from the euro? As more and more pundits and politicians and economists start to talk about how it might be done, and the Greeks themselves struggle to form a viable coalition government (it looks like there will have to be another general election next month), perhaps it is time to think the un-thinkable and start to draft policy for a post-exit world.

Amelia Bourdeau, Westpac Institutional director of foreign exchange, offers her view on the euro ahead of the euro zone's Q1 GDP data tomorrow. "There will be continued headlines about the Greek risk," she adds.

The "Squawk on the Street" news team report the major European averages fell about 2% on Greek and Spanish worries and its impact on U.S. markets, with CNBC's Bob Pisani. Also, CNBC's Capital Markets editor, Gary Kaminsky has the update on Yahoo's CEO's exit, Chesapeake Energy and China.

The situation in the euro zone has become so bleak that it is giving rise to rumors the euro will be tied to the dollar at close to parity, a dramatic fall, which would have severe implications for the US and China. The Financial Times reports.

Turning world events into winning trades. And the Spanish government announces plans to save a battered banking system, with CNBC's Melissa Lee and the Money in Motion traders. Also, will Greece leave the euro zone, with Carolin Schober.